Inventory turnover measures how fast the company turns over its inventory within a year. It is calculated as cost of goods sold divided by average inventory. Fluor Corp's cost of goods sold for the three months ended in Dec. 2014 was $5,094 Mil. Fluor Corp's average inventory for the quarter that ended in Dec. 2014 was $1,665 Mil. Fluor Corp's inventory turnover for the quarter that ended in Dec. 2014 was 3.06.

Days inventory indicates the number of days of goods in sales that a company has in the inventory. Fluor Corp's days inventory for the three months ended in Dec. 2014 was 29.83.

Inventory can be measured by Days Sales of Inventory (DSI). Fluor Corp's days sales of inventory (DSI) for the three months ended in Dec. 2014 was 27.86.

Inventory to revenue ratio determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue. Fluor Corp's inventory to revenue ratio for the quarter that ended in Dec. 2014 was 0.31.

Definition

Fluor Corp's Inventory Turnover for the fiscal year that ended in Dec. 2014 is calculated as

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Explanation

Inventory Turnover measures how fast the company turns over its inventory within a year. A higher inventory turnover means the company has light inventory. Therefore the company spends less money on storage, write downs, and obsolete inventory. If the inventory is too light, it may affect sales because the company may not have enough to meet demand.

1. Days Inventory indicates the number of days of goods in sales that a company has in the inventory.

Fluor Corp's Days Inventory for the three months ended in Dec. 2014 is calculated as:

3. Inventory to Revenue determines the ability of a company to manage their inventory levels. It measures the percentage of Inventories the company currently has on hand to support the current amount of Revenue.

Fluor Corp's Inventory to Revenue for the quarter that ended in Dec. 2014 is calculated as

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Be Aware

Usually retailers pile up their inventories at holiday seasons to meet the stronger demand. Therefore, the inventory of a particular quarter of a year should not be used to calculate inventory turnover. An average inventory is a better indication.

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